Calling condo buyers off the sidelines
Longwood Towers owner will auction 40 luxury units
By Jenifer B. McKim, Globe Staff | March 10, 2009
The stately Longwood Towers was one of the first luxury residences in New England when it opened in the 1920s, and it has been a towering symbol of Old World style ever since. Now, 40 buyers may be able to own a piece of that luxury life at a deep discount.
The owner of the Brookline complex, New-York based iStar Financial, is holding an auction April 4 to sell 40 units in one of Longwood's three towers. The auctioneers said starting bids sought for the units will be as much as 59 percent below the previous asking prices for condos at the Chatham Tower.
Organizers say the two-hour auction is meant to spur sales and reduce inventory. Minimum bids start at $199,000 for studio apartments, $335,000 for two-bedroom units, and $860,000 for three-bedroom units in the Tudor-style building that boasts a concierge, a doorman, and stunning views of downtown Boston.
"We are going to bring in people who put themselves on the sidelines waiting for bottom," said Jon Gollinger, chief executive of the East Coast office of Accelerated Marketing Partners, which is in charge of the auction. "Guess what? We just delivered bottom."
Some local real estate brokers and new homeowners worry the auction will further depress prices at Longwood.
"It's definitely a downer because if someone had to sell, it impacts the appraisal of their place," said Brookline real estate broker Chobee Hoy, who represented some of Longwood's original condo buyers. "It's a wonderful building. It always reminds me of New York City. I knew they were having troubles, but I didn't know to this point."
But Gollinger said an auction - where each unit can sell in as little as two minutes - will show what the market value of the condos are at a time when home prices continue to fall. Condominium sales in Brookline slowed by 16 percent last year, to 645 from 768 in 2007, according to real estate tracker Warren Group. Statewide, condo sales fell by 23 percent in 2008 and the median sales price slipped about 2 percent to $275,000.
"No one is making sales in this market. We are creating a situation where we are going to do 40 sales in a day. How is that bad?" asked Gollinger.
Andrew G. Backman, senior vice president of investor relations and marketing at iStar Financial, said the company hopes the auction proves attractive to prospective buyers.
"Our goal is to create a quality project for current and future owners so that Longwood Towers remains one of Brookline's most coveted addresses," Backman said.
Longwood includes in its history a retinue of celebrities who once called it home, including baseball legend Babe Ruth.
The 4-acre complex was purchased for $105 million in 2005 by the Radco Cos. of Atlanta, with plans for a $30 million renovation. IStar Financial, which held the mortgage to Radco, acquired the property at auction last year through a subsidiary, after Radco and its partner could not afford to complete renovations.
The iStar subsidiary, 20 Chapel Street Lender LLC, has continued to make upgrades. So far, 78 of the complex's 249 units have been sold.
Carolyn Adamson-Mohan and her husband were among the last condo buyers at the complex, purchasing a 1,488-square-foot, two-bedroom unit for $760,000 in January. She she'd prefer the company sell the remaining units than go bankrupt.
"Yes, I didn't get that deal myself, but I feel in five or 10 years I'll be fine as well," said Adamson-Mohan, 55. "It does mean a lot to us that they do survive."
Dexter Russell, 62, said he, too, is worried about the future of the complex. He and his wife purchased a two-bedroom condominium for $1.3 million last summer, one of only two units that are occupied on the Chatham Tower's 10th floor.
"I'm not angry," said Russell, a retired businessman. "I understand the market is bad."
Diane Maloney, who is helping market the towers, expected some residents to complain about the auction, but predicted they'll be happy to have new neighbors. The Chatham Tower has 68 units, of which only nine were sold. There are 14 units for sale at the Belden Tower, and renovations at the final tower, Alden, have not begun.
"We will get some grumbling," said Maloney, president of The Marketing Group of New England Inc., as she walked through the project's main lobby, with its dark wood walls, roaring fireplace, and contemporary furniture. "Probably in the long run it will be the best thing to have a building that is lived in."
Accelerated Marketing Partners' last major auction in Boston was Folio Boston in 2006 - a new condominium development on Broad Street in downtown Boston. Gollinger said 34 condominiums sold for $26 million in one hour and 45 minutes. The company has recently had successful auctions in Atlanta and Chicago.
Debra Taylor Blair, who runs a listing service for condominiums for sale in Boston, cautioned that the word "auction" may give some bargain-hunters the wrong idea.
"Having an auction where there is a floor on the price can be very effective in moving a large number of units all at once," said Taylor Blair, president of Listing Information Network Inc., a company that tracks Boston's real estate market. "The downside, whenever you attach the word auction, is people automatically think fire sale. It is just not the case."
Jenifer McKim can be reached at
jmckim@globe.com.
